The Summit of Coin Millionaire Pledge

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In September of 2016, I wrote an article titled, "We Can All Be Millionaires." The message is as true today as it was a year and a half ago. It's so true that I decided to share part of that article in this pledge:

Some people believe that all millionaires are crooks and only have their millions because they inherited their wealth. According to Thomas Stanley, author of "The Millionaire Next Door," 80% to 86% of the millionaires in America are self-made millionaires. Self-made millionaires are first generation millionaires, which means that they were the first in their family to reach a million dollars. That means that they did it on their own. That means that you can do it on your own also.
 - We Can All Be Millionaires, Sept. 16, 2016

Basically, I was saying that anybody can become a millionaire. My wife and I can become millionaires and you can become a millionaire also! That's where the pledge comes in. You don't just accidentally become a millionaire. You have to have a plan and a set of rules that will help you reach the goal of becoming a millionaire.

What is the Millionaire Pledge?

The millionaire pledge was invented by J Money at Budgets Are Sexy (a creative name right?). This was initially a list of steps that he needed to accomplish each year in order to become a millionaire. He then plugged his monthly savings into the CNN millionaire calculator and voila you have an estimated date to reach a million dollars.

The great thing about J. Money's millionaire to-do-list: It has evolved! Things have changed in his life. He no longer has a regular 9 to 5 job, thus his 401k is no longer an option. However, he now owns his own business and invests in a SEP IRA. Each year, our life will continue to evolve, therefore we must be ready to adjust our goals to fit those changes. 

What does the Summit of Coin millionaire pledge look like?

As I write this article, my wife and I are in our 4th year of marriage, with our 5 year anniversary coming up in a couple of months (Exciting)! We have one child and one on the way (I add this in, because children can affect the amount of savings). Over the course of our marriage, we have seen our net worth grow dramatically.

We are currently 1/5 of the way to becoming millionaires. It took us about four years of marriage to reach 1/5 of a million dollars (started at basically 0). If we can continue on this trend, and increase our net worth by 1/5 every 4 years, we should reach a million dollars in 16 years (However, I tend to think it will be faster, because as your account balances increase, the faster your money grows).

Our Millionaire Pledge is...

  • Focus on Paying Off our Mortgage Early - $20,000 minimum per year
  • Max out Roth IRAs - $11,000
  • Invest 5% in my Wife's 401K and enjoy the 5% match from her company - $7,212
  • Invest in my 403B - $3,600
  • Throw any extra money towards our house

**Note - We are not currently maxing out our 401K or 403B, because we want to get the house paid off and then we will focus on maxing out all retirement. We actually decreased our retirement investing this year, because we want to focus on our home! One more challenge: as a teacher in Texas, I am required to invest 7.5% of my income in a pension called Teacher Retirement System. Sadly, this investment only earns 2% each year. Thus, I don't count it in our millionaire calculation, but it does affect the amount that we throw at investments.

Related: The Beauty of Creating and Sticking to a Plan

With our current net worth level and the pledge to invest the above amount yearly, the CNN millionaire calculator threw out the following years, depending on returns:

  • 4% return: Millionaire in 2034 (16 years) - Age 47
  • 6% return: Millionaire in 2031 (13 years) - Age 44
  • 8% return: Millionaire in 2029 (11 years) - Age 42

So, it's looking like we will reach our goal of a million dollars sometime in our 40s. A 4% return is a little conservative in my book, so I tend to look at either 6% or 8% percent returns on average and even expect most of my investments to return close to 10% on average each year. Therefore, I am underestimating our returns in the hope that we will reach the illustrious million dollars. We could even speed up our millionaire date, if we find extra money to throw at savings or retirement (specifically maxing out retirement)!

What's the big deal of a million dollars?

In all reality, it's not even a million dollars that matters, but what it means to reach the point of financial freedom. That point is where you can start living off of the income that your investments are making each year. To some, this will be more that a million dollars. To others, $800,000 is enough to retire on comfortably. 

It's the idea that retirement is not an age, but a financial number. That number can dictate when you reach the freedom to live life on your own terms, without a job that requires 40 or more hours of your waking hours each week. Most financial bloggers (including myself) don't aspire for wealth just to have wealth, but instead to enjoy the freedom that wealth can give you.

What's your millionaire pledge? Is it crazy to think that becoming a millionaire is attainable for a teacher and a nurse in our 40s? 

Reaching the Financial Summit, Starts with You!

Another great way to estimate and track your net worth is with personal capitol. They have a great retirement claculator and they can estimate whether your money will last you in retirement (whether retirement starts at 40 or 60).

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